Vizsla Resources (TSXV: VZLA) has closed a bought deal private placement for 16 million units of the company at a price of $1.87 per unit for gross proceeds of $30 million and includes the exercise in full of the underwriters’ over-allotment option.
Each unit consists of one common share in the company and one common share purchase warrant, with each warrant entitling the holder to purchase one common share for $2.40 per share.
Under the deal, 2176423 Ontario, a company controlled by Eric Sprott, acquired around 5 million units for a total consideration of $10 million. Following the acquisition, Sprott owns or controls 6.06% of the issued and outstanding common shares of the company on a non-diluted basis and 11.42% on a partially diluted basis, the company reports.
“We very proud and excited to have Eric and a number of other major institutions come in as shareholders in this latest placement,” Michael Konnert, the company’s director and chief executive officer, said in an interview. “The investment supports our vision for the company will fund our plans for further exploration drilling for the next two years.”
Concurrent with the bought deal, the company also completed a non-brokered private placement for 240,000 units for gross proceeds of $448,000.
Total proceeds from the two offerings, Konnert said, will be used to advance the company’s Panuco project and for working capital and general corporate purposes.
Panuco is a district-scale silver-gold project totalling 94 sq. km., located 33 km northeast of Concordia in Sinaloa, Mexico and, Konnert noted, is 80 km south from First Majestic Silver’s (TSX: FR) San Dimas silver-gold mine, which produced over 25 million oz. silver-equivalent in 2019.
“There is a lot of potential risk in the Panuco district where we had vert little known exploration potential and will a relatively serious payment schedule,” Konnert said. “This investment, combined with the initial drilling results form the project, has provided us with a feeling of accomplishment and excitement to push ahead with the pooject.”
In a July 8 press release, Vizsla reported drilling results from the Napoleon vein at Panuco. The highlights include drill hole NP-20-7, which intersected 6 metres grading 1,808.2 grams silver per tonne, 66.8 grams gold (8,078 grams silver-equivalent), and 2.99% lead, and 3.3% zinc starting from 69 metres downhole.
The also included a high-grade core of 4 metres grading 2,889.2 grams silver, 107.9 grams gold (12,992 grams silver-equivalent), 4.8% lead, and 4.56% zinc from 70 metres downhole.
To date, 11 holes have been drilled at the Napoleon vein over 150 metres of strike, which remains open to the north, south, and at depth, the company reports.
“Last month we drilled one of Mexico’s highest-grade holes in the last multiple-decades and its been a whirlwind since then, “Konnert said. “We now have four drill rigs turning on Panuco and are planning to drill over 31,000 metres in 2020, as well as to continue drilling into 2021.”
The company, he added, now has around $34 million in capital, the bulk of which will be used for drilling on the project.
At press time in Toronto, Vizsla was trading at $2.34 per share within a 52-week trading range of 19¢ and $2.94. The company has 68 million common shares outstanding for a $168.6-million market capitalization.